The Honduran government held a press conference today with the participation of the Director of Executive Revenue Office (equivalent to the US’ IRS). During his participation he gave the revenues earned by the different sector of the economy such as hotels, food services, manufacturing andÂ retail. All of these revenues where in two digit million lempira figure.
The purpose of this is to ask business owners to share the wealth by accepting the new minimum wage.
A wave of job losses has swept the country. The Honduran Work Ministry has been swamped with people who’s companies have fired themÂ because they cannot pay the new minimum wage one sidedly authorizedÂ by the Honduran president Jose Manuel Zelaya Rosales.
Many of the people there are carrying official notifications from their companies, that due to the wage increase in times of economic crisis, they will not be able to pay them and so their services are no longer needed.
Most of the workers belong to small, medium and large companies.
The first jobs lost due to the minimum wage increase have been reported in Choluteca’s mayors office. Choluteca’s mayor has officially declared that 147 people will be fired when theÂ minimum wage increase becomes official.
The mayors office will not have the capacity to pay the the higher wage salaries with its limited budget. If they were to pay all those employees, then investment in areas such as health and infrastructure would have to drop almost to zero.
Honduras’ most prominent business leaders will meet today in San Pedro Sula to discuss the minimum wage increase that has been autohorized by the government of Honduras. The minimum wage has moved from Lps. 3,700 to Lps. 5,500, an increase which according to some private business owners will bring a wave of job losses across the board.
Analyst have said that the huge increase in the minimum wage will:
1. Put Honduras in an uncompetitive position when compared to other Central American countries with lower minimum wages and more qualified workers.
2. Increase inflation as many businesses will increase prices to try to offset their workforce costs.
3. Job losses to try to offset their workforce cost.